{"id":1661280,"date":"2022-09-28T02:07:45","date_gmt":"2022-09-28T06:07:45","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1661280"},"modified":"2022-09-28T02:07:54","modified_gmt":"2022-09-28T06:07:54","slug":"analysis-weak-yen-pulling-japan-away-from-boj-kurodas-radicalism","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-weak-yen-pulling-japan-away-from-boj-kurodas-radicalism\/","title":{"rendered":"Analysis-Weak yen pulling Japan away from BOJ Kuroda\u2019s radicalism"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fanalysis-weak-yen-pulling-japan-away-from-boj-kurodas-radicalism%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1661280&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Leika Kihara<\/p>\n<p>TOKYO (Reuters) \u2013     A decade ago, Bank of Japan Governor Haruhiko Kuroda won praise for ending a debilitating spike in the yen with his \u201cbazooka\u201d stimulus.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\">\n<\/div>\n<p>Now the currency\u2019s slide is putting him under siege and forcing him to reluctantly concede that once he leaves next April, the bank may start relaxing its policy that caps bond yields.<\/p>\n<p>True to his dovish streak, Kuroda told a briefing last week the BOJ\u2019s guidance to keep policy rates at \u201ccurrent or lower levels\u201d won\u2019t change for about two to three years \u2013 well beyond the end of his second, five-year term in April.<\/p>\n<p>The remark triggered a sharp yen fall to near 146 to the dollar, from around 144, forcing the government to intervene to prop up the currency for the first time in 24 years.<\/p>\n<p>Four days later, Kuroda retracted the comment and said the guidance won\u2019t last that long, and could change if the economy fully emerges from the COVID-19 pandemic\u2019s pain.<\/p>\n<p>\u201cIn terms of the BOJ\u2019s communication policy, it was a failure,\u201d said veteran BOJ watcher Mari Iwashita. \u201cIt\u2019s hard denying that Kuroda\u2019s slip of tongue pushed the yen below 145.\u201d<\/p>\n<p>The episode underscores a shift in public mood that now sees years of ultra-low rates as less favourable. It also keeps alive the chance the BOJ will tweak its dovish guidance once Kuroda departs.<\/p>\n<p>\u201cThe world is all about inflation and the BOJ will have a new governor,\u201d said a source familiar with the bank\u2019s thinking. \u201cA leadership change opens up opportunities for a policy shift.\u201d<\/p>\n<p>On the surface, the division of labour is clear: The government will use intervention to arrest \u201cexcessive\u201d volatility, while the BOJ will keep rates ultra-low to support the economy.<\/p>\n<p>But the fact the government intervened shortly after Kuroda\u2019s yen-weakening comments highlights the uneasy relationship between the two, some analysts say.<\/p>\n<p>\u201cThe government clearly wants to reverse a weak-yen trend it sees as bad for the economy. The BOJ\u2019s policy runs counter to this goal,\u201d said former BOJ board member Takahide Kiuchi.<\/p>\n<p>\u201cThe timing of intervention looks as if the government had to step in because the BOJ did nothing to tame yen falls,\u201d he said. \u201cIt\u2019s a relationship not going well, or even broken.\u201d<\/p>\n<p>So far, Prime Minister Fumio Kishida\u2019s administration has held off on piling explicit pressure on the BOJ, with the view that ending low rates prematurely could cause a recession and inflate the cost of funding Japan\u2019s huge debt. By law, the government cannot remove a BOJ governor from his post.<\/p>\n<p>But public frustration over the weak yen and rising prices has hurt Kishida\u2019s approval ratings, drawing grumbling from some officials over Kuroda\u2019s stubbornly dovish stance.<\/p>\n<p>\u201cHis comment signalling that interest rates won\u2019t rise for two to three years was unnecessary,\u201d said one government official. \u201cThat\u2019s not his call to make in the first place.\u201d<\/p>\n<p>Domestic media is becoming more aggressive in criticising Kuroda for allowing the yen to fall, which is boosting import prices and increasing the cost of living.<\/p>\n<p>\u201cIt\u2019s time the BOJ review its guidance favouring additional easing, which is inconsistent with the fact inflation has topped its 2% target,\u201d the daily Asahi Shimbun wrote on Saturday.<\/p>\n<p>The usually cool-headed Kuroda raised his voice in anger at Thursday\u2019s briefing when a reporter criticised his stimulus for eroding the yen\u2019s value and leaving households worse off.<\/p>\n<p>\u201cYour comments aren\u2019t based on facts,\u201d he said, defending his stimulus as having ended deflation and created jobs.<\/p>\n<p>CHANGING BOARD COMPOSITION<\/p>\n<p>For now, Kuroda has the backing of his board, which voted unanimously to keep policy steady this month. But Kishida filled two openings in July with less-dovish newcomers, shifting the board\u2019s composition away from Kuroda\u2019s radicalism.<\/p>\n<p>Former bond strategist Hajime Takata, who replaced dovish board member Goushi Kataoka, stressed the need to be mindful of the cost of prolonged easing. Another newcomer said the BOJ could debate an exit from easy policy once wages begin to rise.<\/p>\n<p>BOJ Deputy Governor Masayoshi Amamiya, a top candidate to succeed Kuroda, has said the bank was \u201calways brainstorming tools\u201d for when it ends easy policy.    <\/p>\n<p>In a rare move, the BOJ\u2019s monetary affairs division hosted a series of workshops with private academics to debate Japan\u2019s inflation outlook. Such discussions, as well as various research the BOJ regularly publishes on monetary tools, tend to lay the theoretical groundwork for a policy shift, said two sources familiar with the bank\u2019s thinking.<\/p>\n<p>With no clarity on who Kishida will pick as governor, BOJ staff has yet to lay out a new strategy for their new boss. But if they feel the leadership transition could bring big changes to the existing policy framework, they will draft possible scenarios for the shift or ideas on changing communication about six months in advance, they said.<\/p>\n<p>\u201cThere\u2019s room to reconsider some of the dovish commitments that reflationist-minded policymakers cared about,\u201d one of the sources said. One of them, deputy governor Masazumi Wakatabe, will see his term end in March.<\/p>\n<p>Critics are calling for reviewing the BOJ\u2019s complex framework which combines huge asset buying under quantitative and qualitative easing (QQE) with yield curve control (YCC), under which it sets a negative short-term rate target and a 0% cap on bond yields.<\/p>\n<p>Rising global yields, fuelled by aggressive rate hikes in many countries, have forced the BOJ to offer to buy unlimited amount of bonds to defend the bond cap.<\/p>\n<p>The yen\u2019s slide, driven by the BOJ\u2019s status as the world\u2019s sole central bank keeping negative rates, may add imminency to the debate over the feasibility of maintaining YCC.<\/p>\n<p>\u201cInvestors who think YCC is unsustainable would keep attacking the yield cap. Those who feel the BOJ will successfully maintain YCC can safely keep selling yen,\u201d said former BOJ executive Shigenori Shiratsuka.<\/p>\n<p>\u201cThere are limits to how long the BOJ can keep doing QQE and YCC,\u201d he said. \u201cI think BOJ officials understands this.\u201d<\/p>\n<p> (Reporting by Leika Kihara; Additional reporting by Tetsushi Kajimoto, Yoshifumi Takemoto and Takaya Yamaguchi; Editing by Kim Coghill)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/analysis-weak-yen-pulling-japan\/attachment\/file-photo-bank-of-japan-governor-haruhiko-kuroda-attends-a\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8R05W-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8R05W-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Leika Kihara TOKYO (Reuters) \u2013 A decade ago, Bank of Japan Governor Haruhiko Kuroda won praise for ending a debilitating spike in the yen with his \u201cbazooka\u201d stimulus.<\/p>\n","protected":false},"author":66,"featured_media":1889287,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1661280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_finder_url":"https:\/\/www.oann.com\/business\/analysis-weak-yen-pulling-japan\/?utm_source=rss&utm_medium=rss&utm_campaign=analysis-weak-yen-pulling-japan","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1661280","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1661280"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1661280\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1889287"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1661280"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1661280"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1661280"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}